Complete this question by entering your answers in the tabs below.Req 1Req 2SalesReq 3GARefer to the original data. By automating, the company could reduce variable expenses by $3 per unit. However, fixed expenseswould increase by $53,000 each month. Assume that the company expects to sell 20,800 units next month. Prepare twocontribution format income statements, one assuming that operations are not automated and one assuming that they are. (Showdata on a per unit and percentage basis, as well as in total, for each alternative.) (Do not round your intermediate calculations.Round your percentage answers to the nearest whole number.)TotalReq 4PEM, IncorporatedContribution Income StatementNot AutomatedPer UnitO0$Req 5A< Req 5A0%Req 5B0TotalReq 5CAutomatedPer Unit0 $Req 5C0>0%0Show less A Due to erratic sales of its sole product-a high-capacity battery for laptop computers—PEM, Incorporated, has been experiencingfinancial difficulty for some time. The company's contribution format income statement for the most recent month is given below:Sales (13,000 units x $30 per unit)Variable expensesContribution marginFixed expensesNet operating loss$ 390,000195,000195,000217,500$ (22,500)

Contribution format income statement is prepared under variable costing system, in which variable…

Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,000 units x $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss. $ 390,000 195,000 195,000 217,500 $ (22,500)

Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,000 units x $30 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss. $ 390,000 195,000 195,000 217,500 $ (22,500)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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PEM, Incorporated, is experiencing financial difficulty due to erratic sales of its only product, a high-capacity battery for laptop computers. The company’s contribution format income statement for the most recent month is given below: Sales (13,000 units × $20 per unit) $ 260,000 Variable expenses 156,000 Contribution margin 104,000 Fixed expenses 116,000 Net operating loss $ (12,000) The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $33,000 in the monthly advertising budget, will double unit sales. If the sales manager is right, what will be the revised net operating income (loss)?
KR Corporation's break-even-point in sales is Rs. 900,000, and its variable expenses are 75% of sales. If the company lost Rs. 32,000 last year, sales must have amounted to: _____________ (Don’t try to write any $, Rs or any alphanumeric value in the Provided answer space)
es Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Incorporated, has been experiencing financial difficulty for some time. The company's contribution format income statement for the most recent month is given below: Sales (13,300 units x $20 per unit) Variable expenses Contribution margin Fixed expenses Net operating loss Required: 1. Compute the company's CM ratio and its break-even point in unit sales and dollar sales. 2. The president believes that a $6,300 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will increase unit sales and the total sales by $84,000 per month. If the president is right, what will be the increase (decrease) in the company's monthly net operating income? 3. Refer to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of $31,000 in the monthly advertising budget, will double unit sales. If the sales…
Product U23N has been considered a drag on profits at Jinkerson Corporation for some time and management is considering discontinuing the product altogether. Data from the company's budget for the upcoming year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $ 730,000 $ 350,000 $ 234,000 $ 161,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $144,000 of the fixed manufacturing expenses and $93,000 of the fixed selling and administrative expenses are avoidable if product U23N is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be: Multiple Choice о $15,000 О ($15,000) ($143,000) О $143,000
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Last year Minden Company introduced a new product and sold 25,800 units of it at a price of $95 per unit. The product's variable expenses are $65 per unit and its fixed expenses are $836,100 per year. Required: 1. What was this product's net operating income (loss) last year? 2. What is the product's break-even point in unit sales and dollar sales? 3. Assume the company has conducted a marketing study that estimates it can increase annual sales of this product by 5,000 units for each $2 reduction in its selling price. If the company will only consider price reductions in increments of $2 (e.g., $68, $66, etc.), what is the maximum annual profit that it can earn on this product? What sales volume and selling price per unit generate the maximum profit? 4. What would be the break-even point in unit sales and in dollar sales using the selling price that you determined in requirement 3? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3…
Last year Minden Company introduced a new product and sold 25, 300 units of it at aprice of $99 per unit. The product's variable expenses are $69 per unit and its fixedexpenses are $837,300 per year. Required: 1. What was this product's net operatingincome (loss) last year? 2. What is the product's break - even point in unit sales anddollar sales? 3. Assume the company has conducted a marketing study that estimates itcan increase annual sales of this product by 5.000 units for each $2 reduction in itsselling price. If the company will only consider price reductions in increments of $2 (e.g$68, $66, etc.), what is the maximum annual profit that it can earn on this product?What sales volume and selling price per unit generate the maximum profit? 4. Whatwould be the break - even point in unit sales and in dollar sales using the selling pricethat you determined in requirement 3?
am .106.
D ue to erratic sales of its sole product, a high capacity battery for laptop computers, Salcedo Company has been experiencing difficulty for some time. The company's income statement for the most recent month is given below: Sales (19,500 units @ P500) P9,750,000 Less variable expenses (7,995,000) Contribution margin 1,755,000 Less fixed expenses 1,800,000 Net loss P (45,000) The Marketing Department thinks that a fancy new package for the laptop computer battery would help sales. The new package would increase packaging costs by P7.50 per unit. Assuming no other changes, how many units would have to be sold each month to earn a profit of P262,500?
Last year, Terrific Copying had total revenue of $548019, while operating at 59% of capacity. The total of its variable cost is $141312. Fixed costs were $228530. What is Terrific's break-even point expressed in dollars of revenue? Enter as dollars and cents without a dollar sign or comma. Answer:
Please answer the 2 sections in the images. #4 & #5B
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